Whether the leave encashment should be calculated on Basis Salary of Gross Salary

Jatinder Pahwa · 10-09-2009, 04:35 PM

Dear All,

I am working in a chemical industry. In our company the EL is encashed on Basic salary of employees. Whereas when the full & final settlement of an employee is made the outstanding leaves are first adjusted with the short notice period if any and then the deduction on a/c of notice period is made on gross salary and to the best of my knowledge it is a wrong practise.

Kindly give your opinions how should i took up the matter with our management.

Regards,

Jatinder Pahwa

Jatinder Pahwa · 15-09-2009, 05:04 PM

No reply from any body.

surya_mukherjee · 16-09-2009, 10:45 AM

Hi Jatinder,

1. Leave encashment is always been calculated on Basic salary only.
2. Regarding recovery, it depends on the company policy. Few companies are recovering on gross salary and few are on basic.

But you are right that if you are paying on Basic then you should recover on Basic only.

Thanks & Regards,

Surya